Barclays Africa, China Development Bank pledge infrastructure finance for Africa

Out-Law News | 13 Dec 2017 | 1:29 pm | 1 min. read

Barclays Africa Group Limited and the China Development Bank (CDB) have signed a memorandum of understanding (MoU) aimed at strengthening cooperation and exploring opportunities to fund development projects in Africa.

Barclays said it would use the MoU “to unlock opportunities in order to strengthen its contribution towards Africa’s economic growth and development”, in support of CDB’s “focus on infrastructure finance for roads, railways and dams”.

In addition, Barclays and CDB said they would “explore reciprocal training and development opportunities for their respective investment teams”. Barclays said it had already hosted more than 30 employees from the CDB.

Barclays Africa’s corporate and investment banking co-chief executive Temi Ofong said: “This MoU represents a long-term commitment by senior leadership at Barclays Africa to strengthen our relationship with the world’s largest development finance institution, which has assets of over $2 trillion. This partnership will unlock opportunities that are aligned to our shared growth approach and could facilitate positive socio-economic impact.”

Greg Jones of Pinsent Masons, the law firm behind, said: “This MoU will accelerate the provision of finance to local businesses and small and medium enterprises and will fund much-needed development projects in Africa.”

The CDB was established in 1994 as a policy bank but now operates as a development finance institution for the Chinese government. By 2017, CDB said it had supported more than 500 projects in 43 African countries valued at $50 billion.

According to a report published earlier this year, China’s involvement in Africa through investment, infrastructure and financing is bigger than previous studies have suggested. The report by global consulting firm McKinsey said China’s financial flows to Africa “are around 15% larger than official figures suggest when non-traditional flows are included”.

Trade volume between China and African nations surged 16.8% year-on-year in the first quarter of 2017 to $38.8bn “as bilateral economic relations boomed”, according to ministry figures reported by China’s state Xinhua News Agency. Ministry spokesperson Sun Jiwen said that was “the first quarterly rebound in bilateral trade between China and Africa since 2015, with Chinese imports from Africa up 46% to $18.4bn”.